Scindia: Removing roadblocks
New Delhi, Feb. 8: Power distribution firms (discoms) will get their credit ratings from April, minister of state for power Jyotiraditya Scindia said after a meeting with the representatives of banks and financial institutions to address the problems of the sector.
“CARE and Icra have been given charge to give the ratings,” he said. The ratings will help lenders to discoms to assess their financial risks in the context of their problems, which include fuel shortages and the delay in mining clearances hampering coal output.
“Bankers cited problems faced while lending to power sector projects. Fuel availability and environment hurdles are also matters of concern,” Scindia said.
Representatives from Punjab National Bank, Central Bank, Power Finance Corporation and Rural Electrification Corporation attended the meeting.
According to the finance ministry, state-run banks have sanctioned loans amounting to around Rs 3.4 lakh crore to power firms by March 2012. In addition, Power Finance Corporation and Rural Electrification Corporation have lent Rs 1.15 lakh crore for thermal generation alone.
Scindia stressed the need for regular tariff revisions to improve the financial health of discoms.
“Regular tariff revision is essential not just to ease lending, but to boost private sector investment,” he said.
The power ministry has set up a panel of senior industry executives to advise the government on reforms.
The move comes at a time the country is scrambling to deal with electricity shortages that threaten to derail industrial growth.
According to a government estimate, the country plans to increase generation capacity by 44 per cent to 288 gigawatts in the Twelfth Five-Year Plan (2012-17) at a cost of around Rs 13 trillion.
Power utilities are reeling under a cash crunch, and the government is in the process of rolling out a restructuring package for the discoms.
Officials said the power ministry would seek a financial support of Rs 1,200 crore from the finance ministry for 2013-14 to restructure the debt of state power distribution companies.